I'm looking for other people's thoughts on this question. My 403(b) at Vanguard and an IRA invested in Dell have done quite well, and that raises a new issue. Growth is now almost entirely driven by market returns on my balance, and new investment is only a small contributor. I'm considering not funding a Roth IRA but wondering if I've missed something. Of course I'll continue to take my employer's 2:1 match on the 403(b), but I see less benefit in a further reduction in current cash flow to fund a Roth.When I do the numbers, assuming I'm not going to touch any retirement account until age 55 (18 years) and assuming a real rate of return on Vanguard's Index 500 of 8% or more, the 403(b) alone gives me an annual inflation-adjusted income forever of triple what I now make. What's the reason, if any, for funding a Roth too? Has anyone else considered this question and determined a balance or other threshold at which it no longer makes sense to add new money to their retirement portfolio?
If you are getting 200% match in your 403(b) its a no brainer, ALL 403(b).Phil
What's the reason, if any, for funding a Roth too? Has anyone else considered this question and determined a balance or other threshold at which it no longer makes sense to add new money to their retirement portfolio? Good question...I think the simple answer is: (in the words of Roseanne Rosanna Danna) "Y'know, it's always somethin'. If it's not one thin', it's somethin' else."IOW, you really never know what the future will bring, nor what your personal needs will be. Or, worst case, where the market will be or what will happen to your annuity. Consequently, I would load up for bear, if you can (and want to) afford it. Delayed gratification!Zev
I disagree with zgriner. If you have a reasonable expectation that your retirement will be OK, and you have a good use for the money now, or soon, why not use the money? I hope to go to Australia in 3 years and visit my dear friends I haven't seen in a decade.As John Maynard Keynes said, "In the long run, we are all dead."
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